[FRONT COVER]
February 28, 1998
PHOENIX
FUNDS
SEMIANNUAL REPORT
PHOENIX CORE EQUITY FUND
PHOENIX GROWTH AND INCOME FUND
[PHOENIX DUFF&PHELPS LOGO]
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Mutual funds are not insured by the FDIC; are not deposits or
other obligations of a bank and are not guaranteed by a bank; and
are subject to investment risks, including possible loss of the
principal invested.
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<PAGE>
PHOENIX CORE EQUITY FUND
INVESTOR PROFILE
Phoenix Core Equity Fund is designed for long-term investors seeking
long-term capital appreciation by investing in a diversified portfolio of
common stocks.
INVESTMENT ADVISER'S REPORT
Since the Fund's inception on September 25, 1997 through the end of this
reporting period, February 28, 1998, Class A shares returned 12.82%, Class B
shares earned 12.43%, Class C shares returned 12.42% and Class M shares earned
12.65% compared with a return of 12.66% for the S&P 500 during this period.*
All performance figures assume reinvestment of dividends and exclude the effect
of sales charges.
Our focus on large-capitalization, higher quality stocks contributed to
our outperformance during this period. We believe that investors have preferred
the liquidity that large-cap stocks offer in the current market environment as
well as the consistency of earnings and dividend growth that high quality
investments provide.
In October, when the S&P 500 fell more than 3%, the Fund declined by less
than half that amount as our defensive characteristics -- below-market
price/earnings ratio on the total portfolio -- as well as our high quality
style resulted in significant relative outperformance. We believe this reflects
the Fund's ability to participate not only in strong markets but also provide
downside protection should the market environment deteriorate.
Stock selection has been another key factor that contributed to our
outperformance. We closely monitor a universe of about 120 large-cap, high
quality stocks within the S&P 500, closely scrutinizing both the fundamentals
of these stocks and their relative valuation levels. We determine a price
target as well as an appropriate relative price/earnings multiple for each
company before we consider purchasing a security. This helps us remain
objective in our analysis and provides a disciplined method to monitor existing
holdings.
We also try to identify catalysts for the stocks we purchase that are
likely to cause them to outperform. These catalysts can be a new product, a
management change or a restructuring. Our process is to continually monitor our
holdings in addition to the larger universe of stocks we follow. We reduce or
sell positions when they reach their targeted valuation levels or when a change
in fundamentals warrants.
During the first five months of the Fund's history, our overweighting in
both retailers and pharmaceutical stocks also contributed positively to
performance. We believe that retailers, such as Dayton-Hudson, Home Depot,
Federated and Walgreen's, have benefited from strong consumer confidence,
generally mild winter weather and an increased focus by company managements on
cost reduction and productivity gains.
Our major holdings in pharmaceutical stocks, such as Eli Lilly, Pfizer and
Bristol-Myers, which have strong new-product pipelines and solid earnings
growth prospects, have also positively contributed to performance. However, due
to a sharp run-up in many of our drug holdings, we have reduced several of our
key positions so that we are currently underweighted relative to the market in
this sector.
Proceeds from these sales were used to increase our technology position in
early January to a modest overweighting. Valuation levels had become more
favorable following a weak fourth quarter due to investor concerns about the
impact of the economic turmoil in Southeast Asia.
*The S&P 500 Index is an unmanaged, commonly used measure of common stock total
return performance.
1
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Phoenix Core Equity Fund
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OUTLOOK
For the remainder of 1998, we anticipate that economic growth in the U.S.
will remain moderate with 2.0-2.5% real GDP growth. We also look for inflation
to continue to be very well-controlled at less than 2%. Corporate profit growth
is likely to decelerate in 1998 due to slower revenue growth and a diminishing
favorable impact from productivity gains. We believe the Fund's high quality,
large-capitalization investment style should continue to perform well as
investors are likely to seek liquidity and earnings stability in a slower
growth environment.
2
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Phoenix Core Equity Fund
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INVESTMENTS AT FEBRUARY 28, 1998
(Unaudited)
SHARES VALUE
------ ---------
COMMON STOCKS--93.5%
Airlines--1.1%
AMR Corp. (b) ............................ 1,150 $145,547
--------
Banks (Major Regional)--7.5%
Fleet Financial Group, Inc. .............. 3,500 275,844
NationsBank Corp. ........................ 7,578 519,102
Washington Mutual, Inc. .................. 3,500 234,937
--------
1,029,883
--------
Banks (Money Center)--2.3%
Chase Manhattan Corp. .................... 2,500 310,156
--------
Beverages (Non-Alcoholic)--1.4%
PepsiCo, Inc. ............................ 5,400 197,438
--------
Building Materials--2.5%
Masco Corp. .............................. 6,200 337,125
--------
Chemicals (Specialty)--2.2%
Morton International, Inc. ............... 9,300 307,481
--------
Computers (Hardware)--3.6%
Compaq Computer Corp. .................... 15,300 490,556
--------
Computers (Networking)--3.9%
Cisco Systems, Inc. (b) .................. 8,075 531,941
--------
Computers (Software & Services)--2.5%
Microsoft Corp. (b) ...................... 4,000 339,000
--------
Electrical Equipment--4.7%
Emerson Electric Co. ..................... 6,100 389,256
General Electric Co. ..................... 3,250 252,688
--------
641,944
--------
Entertainment--3.8%
Walt Disney Co. (The) .................... 4,600 514,912
--------
Financial (Diversified)--4.5%
American Express Co. ..................... 3,700 333,231
FNMA ..................................... 4,500 287,156
--------
620,387
--------
Health Care (Diversified)--2.7%
Bristol-Myers Squibb Co. ................. 3,700 370,694
--------
Health Care (Drugs-Major Pharmaceuticals)--3.8%
Pfizer, Inc. ............................. 2,600 230,100
Schering-Plough Corp. .................... 3,800 289,038
--------
519,138
--------
Health Care (Long Term Care)--2.0%
HEALTHSOUTH Corp. (b) .................... 10,300 278,100
--------
Health Care (Medical Products & Supplies)--1.5%
Medtronic, Inc. .......................... 3,800 201,875
--------
Household Products (Non-Durables)--3.7%
Colgate-Palmolive Co. .................... 6,250 507,422
--------
Insurance (Multi-Line)--3.5%
Hartford Financial Services Group, Inc. .. 4,900 481,425
--------
Insurance (Property-Casualty)--2.5%
Allstate Corp. ........................... 3,650 340,362
--------
SHARES VALUE
------ ---------
Lodging--Hotels--2.4%
Marriott International, Inc. ............. 4,300 $325,725
--------
Manufacturing (Diversified)--1.2%
Illinois Tool Works, Inc. ................ 2,700 161,831
--------
Office Equipment & Supplies--2.7%
Pitney Bowes, Inc. ....................... 8,000 375,000
--------
Oil & Gas (Drilling & Equipment)--4.3%
Baker Hughes, Inc. ....................... 5,750 235,391
Cooper Cameron Corp. (b) ................. 2,300 123,337
Halliburton Co. .......................... 5,050 234,825
--------
593,553
--------
Personal Care--3.7%
Avon Products, Inc. ...................... 5,150 362,753
Gillette Co. ............................. 1,300 140,238
--------
,991
--------
Restaurants--1.5%
McDonald's Corp. ......................... 3,700 202,575
--------
Retail (Building Supplies)--1.5%
Home Depot, Inc. ......................... 3,150 201,009
--------
Retail (Department Stores)--2.2%
Federated Department Stores, Inc. (b) .... 6,450 302,344
--------
Retail (Drug Stores)--1.7%
Walgreen Co. ............................. 6,500 238,469
--------
Retail (General Merchandise)--4.2%
Dayton Hudson Corp. ...................... 7,450 575,978
--------
Services (Commercial & Consumer)--4.1%
Service Corporation International ........ 14,950 566,231
--------
Services (Data Processing)--1.4%
First Data Corp. ......................... 5,650 192,100
--------
Telephone--2.9%
Ameritech Corp. .......................... 9,450 393,947
--------
TOTAL COMMON STOCKS
(Identified cost $11,574,520) ............. 12,797,139
--------
PAR
VALUE
(000)
------
SHORT-TERM OBLIGATIONS--3.1%
Money Market Mutual Funds--3.1%
State Street Global Advisors Seven Seas
Money Market Fund (5.40% seven
day effective yield) ................... $ 426 426,284
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $426,284)........................ 426,284
-----------
TOTAL INVESTMENTS--96.6%
(Identified cost $12,000,804)..................... 13,223,423(a)
Cash and receivables,
less liabilities--3.4% ........................ 465,026
-----------
NET ASSETS--100.0% $13,688,449
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,339,563 and gross
depreciation of $116,944 for federal income tax purposes. At February 28,
1998, the aggregate cost of securities for federal income tax purposes was
$12,000,804.
(b) Non-income producing.
See Notes to Financial Statements
3
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Phoenix Core Equity Fund
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STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1998
(Unaudited)
Assets
Investment securities at value
(Identified cost $12,000,804) $13,223,423
Cash 1,907
Receivables
Fund shares sold 806,583
Investment securities sold 231,046
Receivable from adviser 39,672
Interest and dividends 14,068
Prepaid expenses 43,485
-----------
Total assets 14,360,184
-----------
Liabilities
Payables
Investment securities purchased 602,983
Fund shares repurchased 18,638
Transfer agent fee 6,703
Financial agent fee 6,597
Trustees' fee 5,121
Distribution fee 4,418
Accrued expenses 27,275
-----------
Total liabilities 671,735
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Net Assets $13,688,449
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $12,537,749
Undistributed net investment loss (27,459)
Accumulated net realized loss (44,460)
Net unrealized appreciation 1,222,619
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Net Assets $13,688,449
===========
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $8,761,489) 779,560
Net asset value per share $ 11.24
Offering price per share 11.24/(1-4.75%) $ 11.80
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,656,152) 326,194
Net asset value and offering price per share $ 11.21
Class C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,156,727) 103,159
Net asset value and offering price per share $ 11.21
Class M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $114,081) 10,146
Net asset value per share $ 11.24
Offering price per share $11.24/(1-3.50%) $ 11.65
STATEMENT OF OPERATIONS
FROM INCEPTION SEPTEMBER 25, 1997
TO FEBRUARY 28, 1998
(Unaudited)
Investment Income
Dividends $ 47,425
Interest 10,433
----------
Total investment income 57,858
----------
Expenses
Investment advisory fee 27,995
Distribution fee--Class A 7,163
Distribution fee--Class B 6,322
Distribution fee--Class C 1,901
Distribution fee--Class M 226
Financial agent fee 36,992
Registration 39,550
Transfer agent 37,660
Printing 9,827
Professional 9,782
Trustees 9,278
Custodian 5,930
Miscellaneous 3,537
----------
Total expenses 196,163
Less expenses borne by investment adviser (143,221)
----------
Net expenses 52,942
----------
Net investment income 4,916
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (44,460)
Net change in unrealized appreciation (depreciation) on
investments 1,222,619
----------
Net gain on investments 1,178,159
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Net increase in net assets resulting from
operations $1,183,075
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See Notes to Financial Statements
4
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Phoenix Core Equity Fund
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STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
September 25, 1997 to
February 28, 1998
(Unaudited)
----------------------
<S> <C>
From Operations
Net investment income $ 4,916
Net realized loss (44,460)
Net change in unrealized appreciation (depreciation) 1,222,619
-----------
Increase in net assets resulting from operations 1,183,075
-----------
From Distributions to Shareholders
Net investment income--Class A (25,288)
Net investment income--Class B (5,118)
Net investment income--Class C (1,736)
Net investment income--Class M (233)
-----------
Decrease in net assets from distributions to shareholders (32,375)
-----------
From Share Transactions
Class A
Proceeds from sales of shares (831,055 shares) 8,448,791
Net asset value of shares issued from reinvestment of distributions (2,335 shares) 23,837
Cost of shares repurchased (53,830 shares) (559,140)
-----------
Total 7,913,488
-----------
Class B
Proceeds from sales of shares (327,184 shares) 3,444,510
Net asset value of shares issued from reinvestment of distributions (166 shares) 1,697
Cost of shares repurchased (1,156 shares) (20,613)
-----------
Total 3,425,594
-----------
Class C
Proceeds from sales of shares (117,244 shares) 1,245,541
Net asset value of shares issued from reinvestment of distributions (85 shares) 865
Cost of shares repurchased (14,170 shares) (149,227)
-----------
Total 1,097,179
-----------
Class M
Proceeds from sales of shares (10,123 shares) 101,255
Net asset value of shares issued from reinvestment of distributions (23 shares) 233
Cost of shares repurchased (0 shares) --
-----------
Total 101,488
-----------
Increase in net assets from share transactions 12,537,749
-----------
Net increase in net assets 13,688,449
Net Assets
Beginning of period 0
-----------
End of period (including undistributed net investment loss of ($27,459)) $13,688,449
===========
</TABLE>
See Notes to Financial Statements
5
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Phoenix Core Equity Fund
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FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A Class B Class C Class M
-------------- -------------- -------------- --------------
From Inception From Inception From Inception From Inception
9/25/97 to 9/25/97 to 9/25/97 to 9/25/97 to
2/28/98 2/28/98 2/28/98 2/28/98
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
Income from investment operations(1)
Net investment income (loss) 0.01(2)(3) (0.02)(2)(3) (0.02)(2)(3) 0.00(2)(3)
Net realized and unrealized gain 1.27 1.26 1.26 1.26
------- ------- ------- -------
Total from investment operations 1.28 1.24 1.24 1.26
------- ------- ------- -------
Less distributions
Dividends from net investment income (0.04) (0.03) (0.03) (0.02)
Dividends from net realized gains -- -- -- --
------- ------- ------- -------
Total distributions (0.04) (0.03) (0.03) (0.02)
------- ------- ------- ------
Change in net asset value 1.24 1.21 1.21 1.24
------- ------- ------- -------
Net asset value, end of period $11.24 $11.21 $11.21 $11.24
======= ======= ======= =======
Total return(4) 12.82%(5) 12.43%(5) 12.42%(5) 12.65%(5)
Ratios/supplemental data:
Net assets, end of period (thousands) $8,761 $3,656 $1,157 $114
Ratio to average net assets of:
Operating expenses 1.25%(6) 2.00%(6) 2.00%(6) 1.50%(6)
Net investment income (loss) 0.32%(6) (0.52%)(6) (0.52%)(6) 0.10%(6)
Portfolio turnover 38%(5) 38%(5) 38%(5) 38%(5)
Average commission rate paid(7) $0.0500 $0.0500 $0.0500 $0.0500
</TABLE>
(1) Distributions are made in accordance with the Prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(2) Computed using average shares outstanding.
(3) Includes reimbursement of operating expenses by investment adviser of
$0.16, $0.16, $0.16 and $0.16, respectively.
(4) Maximum sales charges are not reflected in the total return calculation.
(5) Not annualized
(6) Annualized
(7) A fund is required to disclose its average commission rate per share for
securities trades on which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
6
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PHOENIX GROWTH AND INCOME FUND
INVESTOR PROFILE
Phoenix Growth and Income Fund is designed for long-term investors seeking
dividend growth, current income and capital appreciation through investments in
common stocks.
INVESTMENT ADVISER'S REPORT
Since the Fund's inception on September 25, 1997 through the end of this
reporting period, February 28, 1998, Class A shares returned 15.06%, Class B
shares earned 14.74%, Class C shares returned 14.72% and Class M shares earned
14.97%. Total return, as measured by Class A shares, was 240 basis points
higher than the 12.66% return of the S&P 500 benchmark portfolio.* All
performance figures assume reinvestment of dividends and exclude the effect of
sales charges.
Since the opening of the Growth and Income Fund last September, the equity
market has continued to post strong gains. The rising tide in stock prices has
been fueled by declining interest rates, rising corporate profits, robust cash
flows into equity mutual funds, mergers and acquisitions, and share buybacks.
Large-capitalization stocks continue to dominate small caps. Over the
reporting period, the large cap S&P 500 Index returned 12.7% compared with a
3.7% return for the small-cap Russell 2000 Index**. Portfolio managers have
favored large-cap stocks for their superior liquidity and strong earnings
generated by restructuring benefits and economies of scale.
In terms of style, growth stocks returned more than value type companies.
The S&P 500/BARRA Growth Index*** returned 15.0% versus an 8.7% return for the
Value Index****. There was a "flight to quality" as investors sought refuge in
blue-chip growth names like Gillette (which was up 26% during the period) as
concerns about Asian economies peaked.
Stocks in the consumer cyclical sector had the best returns. Fueled by
high consumer confidence and strong payroll employment, companies in the
automobile, home furnishings and retail industries had the highest returns. The
worst performing sector of the market was energy. The price of crude oil fell
24%, from $20.40 to $15.44. Traders worried about a glut of crude oil as OPEC
countries produced in excess of their quotas and demand fell as economic
activity in Asia contracted and warm El Nino weather in North America reduced
demand for heating oil and natural gas.
The portfolio benefited from holdings in the automobile, brokerage,
computer software and telecommunications industries. We will discuss one stock
in each industry respectively. Ford stock was up 31% during the reporting
period as earnings continued to surprise analysts on the upside due to
cost-cutting and a profitable mix of high-margin sport utility vehicles. Ford
also announced the spin-off of Associates First Capital and the possibility of
a share buyback.
Morgan Stanley, Dean Witter, Discover and Co. shares rose 25% on strong
fourth-quarter earnings and the announcement of $3 billion stock repurchase.
Microsoft stock rose 28% on stronger than expected earnings and the upcoming
release of several new product versions in the second half of 1998. We added to
the position in December as momentum investors sold the stock to bargain levels
due to concern about the anti-trust lawsuit with the Justice Department and
Asia concerns. BellSouth Corp. rose 33% on a double digit earnings increase
from strong sales of high margin services like call waiting and caller ID, and
growth in new phone lines due to
7
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Phoenix Growth and Income Fund
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the strong housing cycle and new business formation.
OUTLOOK
S&P 500 operating earnings are expected to rise about 8% this year.
Combined with the 2% dividend yield, we would expect a total return on stocks
of about 10%, in line with historical averages. What could cause the stock
averages to rise more would be strengthening flows into equity mutual funds as
Americans continue to focus on saving for their future. Another catalyst for
growth in stock prices is a reduction in the supply of equity shares
outstanding from cash buyouts (mergers and acquisitions) and corporate share
repurchase programs.
*The S&P 500 Index is an unmanaged, commonly used measure of common stock
total return performance.
**The Russell 2000 Index is a commonly used, unmanaged indicator of stock
market total return performance for small-cap companies.
***The S&P 500/BARRA Growth Index is a capitalization-weighted Index,
consisting of those S&P 500 companies with the highest price-to-book ratios.
****The S&P 500/BARRA Value Index is a capitalization-weighted index,
consisting of those S&P 500 companies with the lowest price-to-book ratios.
8
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Phoenix Growth and Income Fund
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INVESTMENTS AT FEBRUARY 28, 1998
(Unaudited)
SHARES VALUE
------ ---------
COMMON STOCKS--91.9%
Aerospace/Defense--2.0%
General Dynamics Corp. ................... 5,100 $442,425
Gulfstream Aerospace Corp. (b) ........... 700 28,350
Sundstrand Corp. ......................... 400 24,200
Thiokol Corp. ............................ 1,000 95,625
--------
590,600
--------
Airlines--1.1%
AMR Corp. (b) ............................ 1,700 215,156
Continental Airlines, Inc. Class B (b) ... 800 40,200
Delta Air Lines, Inc. .................... 500 56,531
US Airways Group, Inc. (b) ............... 300 18,994
--------
330,881
--------
Auto Parts & Equipment--0.3%
ITT Industries, Inc. ..................... 2,900 99,325
--------
Automobiles--3.9%
Chrysler Corp. ........................... 700 27,256
Ford Motor Co. ........................... 16,200 916,312
General Motors Corp. ..................... 3,100 213,706
--------
1,157,274
--------
Banks (Major Regional)--3.7%
Banc One Corp. ........................... 550 31,075
Bank of New York Co., Inc. ............... 1,300 76,131
BankBoston Corp. ......................... 400 39,875
First Empire State Corp. ................. 100 47,200
First of America Bank Corp. .............. 600 46,613
First Union Corp. ........................ 1,900 100,106
Fleet Financial Group, Inc. .............. 3,000 236,438
Golden State Bancorp, Inc. (b) ........... 1,400 49,875
NationsBank Corp. ........................ 3,700 253,450
State Street Corp. ....................... 1,100 67,994
UnionBanCal Corp. ........................ 1,600 149,000
--------
1,097,757
--------
Banks (Money Center)--4.8%
BankAmerica Corp. ........................ 6,800 527,000
Bankers Trust New York Corp. ............. 2,400 283,800
Chase Manhattan Corp. .................... 2,800 347,375
Citicorp ................................. 1,700 225,250
Morgan (J.P.) & Co., Inc. ................ 400 47,800
--------
1,431,225
--------
Beverages (Alcoholic)--0.2%
Coors (Adolph) Co. Class B ............... 2,000 62,500
--------
Beverages (Non-Alcoholic)--0.6%
Coca-Cola Co. ............................ 1,600 109,900
PepsiCo, Inc. ............................ 2,000 73,125
--------
183,025
--------
Building Materials--0.4%
Fleetwood Enterprises, Inc. .............. 700 32,812
Martin Marietta Materials, Inc. .......... 700 26,644
Masco Corp. .............................. 1,300 70,687
--------
130,143
--------
SHARES VALUE
------ ---------
Chemicals--2.9%
Dow Chemical Co. ......................... 7,200 $658,800
Du Pont (E.I.) de Nemours & Co. .......... 1,300 79,706
Lyondell Petrochemical Co. ............... 5,300 144,425
--------
882,931
--------
Chemicals (Specialty)--1.7%
ARCO Chemical Co. ........................ 4,600 217,637
Dexter Corp. ............................. 3,000 121,875
International Specialty Products, Inc. (b) 700 11,156
Lubrizol Corp. ........................... 2,300 88,694
Witco Corp. .............................. 2,000 79,625
--------
518,987
--------
Computers (Hardware)--3.1%
Compaq Computer Corp. .................... 10,000 320,625
Dell Computer Corp. (b) .................. 600 83,925
Hewlett Packard Co. ...................... 4,200 281,400
International Business Machines Corp. .... 600 62,663
Sun Microsystems, Inc. (b) ............... 4,000 190,500
--------
939,113
--------
Computers (Networking)--0.2%
Cisco Systems, Inc. (b) .................. 800 52,700
Visual Networks, Inc. (b) ................ 1,000 20,125
--------
72,825
--------
Computers (Peripherals)--0.1%
Storage Technology Corp. (b) ............. 600 40,950
--------
Computers (Software & Services)--3.9%
Autodesk, Inc. ........................... 2,000 94,750
Cadence Design Systems, Inc. (b) ......... 700 24,456
Computer Associates International, Inc. .. 1,400 65,975
Comverse Technology, Inc. (b) ............ 800 37,400
DoubleClick, Inc. (b) .................... 300 9,581
Microsoft Corp. (b) ...................... 9,800 830,550
Platinum Technology, Inc. (b) ............ 1,100 27,913
Sterling Software, Inc. (b) .............. 700 36,881
Symantec Corp. (b) ....................... 2,200 55,413
--------
1,182,919
--------
Conglomerates--0.5%
Ogden Corp. .............................. 5,100 140,250
--------
Distributors (Food & Health)--0.1%
Bergen Brunswig Corp. Class A ............ 700 31,500
--------
Electric Companies--4.0%
Consolidated Edison, Inc. ................ 5,800 246,500
Dominion Resources, Inc. ................. 3,500 139,563
Edison International ..................... 1,800 49,725
Enova Corp. .............................. 3,000 76,500
FPL Group, Inc. .......................... 3,400 197,413
GPU, Inc. ................................ 600 24,113
Minnesota Power & Light Co. .............. 7,900 319,456
Public Service Company of New Mexico ..... 1,000 23,313
Rochester Gas & Electric Corp. ........... 3,200 99,800
Southern Co. ............................. 1,300 32,094
--------
1,208,477
--------
See Notes to Financial Statements
9
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Phoenix Growth and Income Fund
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SHARES VALUE
------ ---------
Electrical Equipment--1.2%
General Electric Co. .................... 4,500 $349,875
--------
Electronics (Defense)--0.4%
Raytheon Co. Class B .................... 1,900 111,744
--------
Electronics (Instrumentation)--0.4%
Linear Technology Corp. ................. 700 53,025
SCI Systems, Inc. (b) ................... 1,300 58,500
--------
111,525
--------
Electronics (Semiconductors)--1.4%
Genesis Microchip, Inc. (b) ............. 10,000 131,875
Intel Corp. ............................. 2,000 179,375
PMC-Sierra, Inc. (b) .................... 1,000 36,000
Texas Instruments, Inc. ................. 1,100 63,663
--------
410,913
--------
Engineering & Construction--0.7%
Vulcan Materials Co. .................... 2,100 211,312
--------
Financial (Diversified)--3.6%
American Express Co. .................... 2,800 252,175
Concord EFS, Inc. (b) ................... 1,200 37,350
FNMA .................................... 1,500 95,719
Greenpoint Financial Corp. .............. 700 51,975
Imperial Bancorp (b) .................... 2,300 75,900
Morgan Stanley, Dean Witter, Discover
and Co. ............................... 8,200 571,438
--------
1,084,557
--------
Foods--2.0%
Campbell Soup Co. ....................... 1,100 63,869
Dean Foods Co. .......................... 1,200 66,000
Interstate Bakeries Corp. ............... 1,200 40,200
Kellogg Co. ............................. 400 17,050
Lance, Inc. ............................. 2,700 62,775
Quaker Oats Co. ......................... 4,600 247,825
Richfood Holdings, Inc. ................. 3,200 91,000
--------
588,719
--------
Footwear--0.3%
Payless ShoeSource, Inc. (b) ............ 1,500 100,875
--------
Health Care (Diversified)--2.2%
American Home Products Corp. ............ 400 37,500
Bristol-Myers Squibb Co. ................ 4,200 420,787
Johnson & Johnson ....................... 800 60,400
Mylan Laboratories, Inc. ................ 3,700 75,387
Warner-Lambert Co. ...................... 500 73,125
--------
667,199
--------
Health Care (Drugs-Major Pharmaceuticals)--4.1%
Biogen, Inc. (b) ........................ 500 22,062
Dura Pharmaceuticals, Inc. (b) .......... 400 10,050
ICN Pharmaceuticals, Inc. ............... 800 46,200
Merck & Co., Inc. ....................... 2,600 331,662
Pfizer, Inc. ............................ 5,700 504,450
Schering-Plough Corp. ................... 4,100 311,856
--------
1,226,280
--------
Health Care (Long Term Care)--0.2%
HEALTHSOUTH Corp. (b) ................... 2,500 67,500
--------
SHARES VALUE
------ ---------
Health Care (Managed Care)--0.5%
United Healthcare Corp. ................. 1,000 $ 60,687
Wellpoint Health Networks (b) ........... 1,500 87,656
--------
148,343
--------
Health Care (Medical Products & Supplies)--0.6%
Hillenbrand Industries, Inc. ............ 500 28,094
Patterson Dental Co. (b) ................ 1,500 45,375
Physician Sales & Service, Inc. (b) ..... 1,800 37,575
Stryker Corp. ........................... 1,800 73,687
--------
184,731
--------
Health Care (Specialized Services)--0.6%
Province Healthcare Co. (b) ............. 8,000 166,000
Total Renal Care Holdings, Inc. (b) ..... 800 25,750
--------
191,750
--------
Homebuilding--0.1%
Centex Corp. ............................ 500 36,531
--------
Household Products (Non-Durables)--0.1%
Procter & Gamble Co. .................... 500 42,469
--------
Insurance (Multi-Line)--4.5%
American International Group, Inc. ...... 600 72,113
Conseco, Inc. ........................... 2,000 93,875
Equitable Companies, Inc. ............... 2,000 104,625
Everest Reinsurance Holdings, Inc. ...... 1,000 36,875
Hartford Financial Services Group, Inc. . 1,300 127,725
Lincoln National Corp. .................. 2,500 209,375
Travelers Group, Inc. ................... 12,800 713,600
--------
1,358,188
--------
Insurance (Property-Casualty)--1.7%
20th Century Industries ................. 700 18,725
Allstate Corp. .......................... 2,600 242,450
General Re Corp. ........................ 1,100 234,300
--------
495,475
--------
Insurance Brokers--0.2%
Marsh & McLennan Companies, Inc. ........ 600 52,013
--------
Investment Banking/Brokerage--0.7%
Edwards (A.G.), Inc. .................... 600 25,238
Merrill Lynch & Co., Inc. ............... 2,400 171,750
--------
196,988
--------
Iron & Steel--0.0%
USX-U.S. Steel Group, Inc. .............. 200 7,025
--------
Leisure Time (Products)--0.2%
Mattel, Inc. ............................ 1,700 71,931
--------
Machinery (Diversified)--2.7%
Case Corp. .............................. 400 26,025
Caterpillar, Inc. ....................... 5,700 311,362
Deere & Co. ............................. 3,700 207,662
Ingersoll-Rand Co. ...................... 5,600 266,700
Timken Co. .............................. 200 6,450
--------
818,199
--------
See Notes to Financial Statements
10
<PAGE>
Phoenix Growth and Income Fund
- --------------------------------------------------------------------------------
SHARES VALUE
------ ---------
Manufacturing (Diversified)--5.1%
Eaton Corp. ............................. 3,000 $288,187
Johnson Controls, Inc. .................. 300 16,669
National Service Industries, Inc. ....... 7,600 421,325
Teleflex, Inc. .......................... 700 28,394
Tredegar Industries, Inc. ............... 800 56,000
Tyco International Ltd. ................. 1,800 91,350
United Technologies Corp. ............... 7,100 634,119
--------
1,536,044
--------
Manufacturing (Specialized)--0.1%
Parker-Hannifin Corp. ................... 500 23,312
--------
Natural Gas--0.6%
UGI Corp. ............................... 2,500 71,563
UtiliCorp United, Inc. .................. 2,800 100,800
--------
172,363
--------
Office Equipment & Supplies--0.4%
Lexmark International Group, Inc. (b) ... 500 21,375
Steelcase, Inc. (b) ..................... 3,000 108,188
--------
129,563
--------
Oil (Domestic Integrated)--0.3%
Atlantic Richfield Co. .................. 1,000 77,750
--------
Oil (International Integrated)--2.3%
Chevron Corp. ........................... 2,500 202,813
Exxon Corp. ............................. 4,300 274,663
Mobil Corp. ............................. 3,100 224,556
--------
702,032
--------
Oil & Gas (Drilling & Equipment)--3.0%
BJ Services Co. (b) ..................... 1,100 37,813
Camco International, Inc. ............... 1,000 58,500
Dresser Industries, Inc. ................ 3,300 147,469
ENSCO International, Inc. ............... 500 14,563
Halliburton Co. ......................... 1,700 79,050
Schlumberger Ltd. ....................... 5,800 437,175
Smith International, Inc. (b) ........... 400 21,300
Tidewater, Inc. ......................... 2,500 111,250
--------
907,120
--------
Oil & Gas (Exploration & Production)--0.4%
MDU Resources Group, Inc. ............... 1,200 37,125
Peoples Energy Corp. .................... 2,400 86,700
--------
123,825
--------
Oil & Gas (Refining & Marketing)--0.3%
Piedmont Natural Gas Co., Inc. .......... 1,000 31,000
Sun Co., Inc. ........................... 1,800 71,888
--------
102,888
--------
Paper & Forest Products--0.1%
Bowater, Inc. ........................... 700 34,650
--------
Photography/Imaging--0.6%
Xerox Corp. ............................. 2,000 177,375
--------
SHARES VALUE
------ ---------
Professional Services--0.5%
FPA Medical Management, Inc. (b) ........ 2,000 $ 46,250
Kelly Services, Inc. Class A ............ 600 21,375
Valassis Communications, Inc. (b) ....... 1,900 72,438
--------
140,063
--------
Publishing--0.1%
United Video Satellite Group, Inc.
Class A (b) ........................... 600 22,200
--------
Publishing (Newspapers)--0.2%
Gannett Co., Inc. ....................... 700 45,194
--------
REITS--1.0%
Meditrust Companies ..................... 10,000 307,500
--------
Retail (Building Supplies)--0.6%
Home Depot, Inc. ........................ 2,600 165,912
--------
Retail (Computers & Electronics)--0.2%
Tandy Corp. ............................. 1,000 44,500
--------
Retail (Department Stores)--0.3%
Federated Department Stores, Inc. (b) ... 2,100 98,437
--------
Retail (General Merchandise)--1.5%
CompUSA, Inc. (b) ....................... 1,500 52,500
Costco Companies, Inc. (b) .............. 600 29,325
Dayton Hudson Corp. ..................... 1,400 108,237
Fingerhut Companies, Inc. ............... 2,800 69,475
Office Depot, Inc. (b) .................. 900 24,750
Ross Stores, Inc. ....................... 2,700 106,312
Tiffany & Co. ........................... 700 32,900
U.S. Office Products Co. (b) ............ 1,500 27,750
--------
451,249
--------
Retail (Specialty-Apparel)--0.2%
TJX Companies, Inc. (The) ............... 1,600 61,800
--------
Services (Advertising/Marketing)--0.2%
Omnicom Group, Inc. ..................... 1,000 45,750
--------
Services (Commercial & Consumer)--2.0%
Deluxe Corp. ............................ 5,700 194,156
Quanta Services, Inc. (b) ............... 20,000 238,750
Viad Corp. .............................. 6,800 164,475
--------
597,381
--------
Telecommunications (Long Distance)--2.7%
AT&T Corp. .............................. 8,700 529,612
Telecom Corp. (b) ....................... 4,700 180,362
WorldCom, Inc. (b) ...................... 2,400 91,650
--------
801,624
--------
Telecommunications Equipment--1.3%
Lucent Technologies, Inc. ............... 2,600 281,775
Tellabs, Inc. (b) ....................... 2,000 120,750
--------
402,525
--------
Telephone--3.3%
Ameritech Corp. ......................... 4,200 175,087
Bell Atlantic Corp. ..................... 1,100 98,725
BellSouth Corp. ......................... 9,500 579,500
GTE Corp. ............................... 800 43,300
US West Communications Group ............ 1,500 78,094
--------
974,706
--------
See Notes to Financial Statements
11
<PAGE>
Phoenix Growth and Income Fund
- --------------------------------------------------------------------------------
SHARES VALUE
------ ---------
Textiles (Apparel)--1.0%
Jones Apparel Group, Inc. (b) ........... 800 $ 44,000
Kellwood Co. ............................ 1,200 38,925
Liz Claiborne, Inc. ..................... 2,800 140,000
Nautica Enterprises, Inc. (b) ........... 800 23,050
VF Corp. ................................ 1,100 52,456
--------
298,431
--------
Tobacco--1.7%
Philip Morris Companies, Inc. ........... 7,700 334,469
Universal Corp. ......................... 3,600 171,000
--------
505,469
--------
TOTAL COMMON STOCKS
(Identified cost $25,324,332) ........... 27,584,487
--------
FOREIGN COMMON STOCKS-- 4.9%
Chemicals (Diversified)--1.3%
Akzo Nobel NV Sponsored ADR
(Netherlands) (b) ...................... 4,000 406,000
--------
Computers (Software & Services)--0.1%
Check Point Software Technologies Ltd.
(Israel) (b) ........................... 400 15,425
--------
Foods--1.2%
Unilever NV NY Registered Shares
(Netherlands) .......................... 5,500 353,719
--------
Insurance (Multi-Line)--0.2%
Mid Ocean Ltd. (Bermuda) ................ 900 55,181
--------
Oil (Domestic Integrated)--0.1%
YPF SA Sponsored ADR (Argentina) (b) .... 800 25,300
--------
Oil (International Integrated)--0.4%
Royal Dutch Petroleum Co. NY Registered
Shares (Netherlands) ................... 2,100 114,056
--------
Railroads--0.7%
Canadian National Railway Co. (Canada) .. 3,400 211,225
--------
Telecommunications Equipment--0.2%
Telefonaktiebolabet LM Ericsson
Sponsored ADR (Sweden) ................. 1,500 67,969
--------
Telephone--0.7%
BCE, Inc. (Canada) ...................... 6,500 231,156
--------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $1,295,377) ............ 1,480,031
--------
SHARES VALUE
------ ---------
UNIT INVESTMENT TRUSTS--1.8%
S&P 500 Depositary Receipts ............. 5,100 $535,819
--------
TOTAL UNIT INVESTMENT TRUSTS
(Identified cost $484,474) .............. 535,819
--------
TOTAL LONG-TERM INVESTMENTS--98.6%
(Identified cost $27,104,183) ........... 29,600,337
--------
STANDARD PAR
& POOR'S VALUE
RATING (000)
--------- ------
SHORT-TERM OBLIGATIONS--2.9%
Commercial Paper--2.9%
Koch Industries, Inc. 5.67%,
3/2/98 ..................... A-1+ $870 869,863
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $869,863)..................... 869,863
-----------
TOTAL INVESTMENTS--101.5%
(Identified cost $27,974,046) .................. 30,470,200(a)
Cash and receivables,
less liabilities--(1.5%) ..................... (440,185)
-----------
NET ASSETS--100.0% $30,030,015
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,709,745 and gross
depreciation of $213,591 for federal income tax purposes. At February 28,
1998, the aggregate cost of securities for federal income tax purposes was
$27,974,046.
(b) Non-income producing.
See Notes to Financial Statements
12
<PAGE>
Phoenix Growth and Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1998
(Unaudited)
Assets
Investment securities at value
(Identified cost $27,974,046) $30,470,200
Cash 28,641
Receivables
Fund shares sold 722,123
Dividends and interest 47,467
Receivable from adviser 13,378
Prepaid expenses 43,518
-----------
Total assets 31,325,327
-----------
Liabilities
Payables
Investment securities purchased 1,144,921
Fund shares repurchased 70,602
Distribution fee 9,878
Transfer agent fee 8,220
Financial agent fee 6,597
Trustees' fee 5,121
Accrued expenses 49,973
-----------
Total liabilities 1,295,312
-----------
Net Assets $30,030,015
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $27,176,880
Undistributed net investment loss (9,750)
Accumulated net realized gain 366,731
Net unrealized appreciation 2,496,154
-----------
Net Assets $30,030,015
===========
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $18,483,582) 1,616,523
Net asset value per share $ 11.43
Offering price per share $11.43/(1-4.75%) $ 12.00
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $7,549,758) 661,818
Net asset value and offering price per share $ 11.41
Class C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,448,702) 302,237
Net asset value and offering price per share $ 11.41
Class M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $547,973) 47,947
Net asset value per share $ 11.43
Offering price per share $11.43/(1-3.50%) $ 11.84
STATEMENT OF OPERATIONS
FROM INCEPTION SEPTEMBER 25, 1997
TO FEBRUARY 28, 1998
(Unaudited)
Investment income
Dividends $ 119,808
Interest 16,471
----------
Total investment income 136,279
----------
Expenses
Investment advisory fee 47,864
Distribution fee--Class A 11,626
Distribution fee--Class B 12,226
Distribution fee--Class C 4,079
Distribution fee--Class M 503
Financial agent fee 36,992
Registration 50,200
Transfer agent 38,702
Printing 17,872
Custodian 14,177
Professional 9,783
Trustees 9,278
Miscellaneous 7,579
----------
Total expenses 260,881
Less expenses borne by investment adviser (168,626)
----------
Net expenses 92,255
----------
Net investment income 44,024
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 405,481
Net change in unrealized appreciation (depreciation)
on investments 2,496,154
----------
Net gain on investments 2,901,635
----------
Net increase in net assets resulting from
operations $2,945,659
==========
See Notes to Financial Statements
13
<PAGE>
Phoenix Growth and Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
September 25, 1997 to
February 28, 1998
(Unaudited)
----------------------
<S> <C>
From Operations
Net investment income $ 44,024
Net realized gain 405,481
Net change in unrealized appreciation (depreciation) 2,496,154
-----------
Increase in net assets resulting from operations 2,945,659
-----------
From Distributions to Shareholders
Net investment income--Class A (42,177)
Net investment income--Class B (8,886)
Net investment income--Class C (2,045)
Net investment income--Class M (666)
Net realized gains--Class A (28,476)
Net realized gains--Class B (7,740)
Net realized gains--Class C (1,972)
Net realized gains--Class M (562)
-----------
Decrease in net assets from distributions to shareholders (92,524)
-----------
From Share Transactions
Class A
Proceeds from sales of shares (1,676,653 shares) 17,187,479
Net asset value of shares issued from reinvestment of distributions (6,828 shares) 69,034
Cost of shares repurchased (66,958 shares) (697,239)
-----------
Total 16,559,274
-----------
Class B
Proceeds from sales of shares (670,415 shares) 7,036,397
Net asset value of shares issued from reinvestment of distributions (1,596 shares) 16,121
Cost of shares repurchased (10,193 shares) (107,850)
-----------
Total 6,944,668
-----------
Class C
Proceeds from sales of shares (304,063 shares) 3,200,392
Net asset value of shares issued from reinvestment of distributions (382 shares) 3,862
Cost of shares repurchased (2,208 shares) (21,814)
-----------
Total 3,182,440
-----------
Class M
Proceeds from sales of shares (47,826 shares) 489,271
Net asset value of shares issued from reinvestment of distributions (121 shares) 1,227
Cost of shares repurchased (0 shares) --
-----------
Total 490,498
-----------
Increase in net assets from share transactions 27,176,880
-----------
Net increase in net assets 30,030,015
Net Assets
Beginning of period 0
-----------
End of period (including undistributed net investment loss of ($9,750)) $30,030,015
===========
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Phoenix Growth and Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A Class B Class C Class M
---------------- ---------------- ---------------- ---------------
From Inception From Inception From Inception From Inception
9/25/97 to 9/25/97 to 9/25/97 to 9/25/97 to
2/28/98 2/28/98 2/28/98 2/28/98
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
Income from investment operations(1)
Net investment income 0.04(2) 0.02(2) 0.02(2) 0.03(2)
Net realized and unrealized gain 1.46 1.45 1.45 1.46
------- -------- ------- -------
Total from investment operations 1.50 1.47 1.47 1.49
------- -------- ------- -------
Less distributions
Dividends from net investment income (0.04) (0.03) (0.03) (0.03)
Dividends from net realized gains (0.03) (0.03) (0.03) (0.03)
------- -------- ------- --------
Total distributions (0.07) (0.06) (0.06) (0.06)
------- -------- ------- --------
Change in net asset value 1.43 1.41 1.41 1.43
------- -------- ------- --------
Net asset value, end of period $11.43 $11.41 $11.41 $11.43
======= ======== ======= =======
Total return(3) 15.06%(4) 14.74%(4) 14.72%(4) 14.97%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $18,484 $7,550 $3,449 $548
Ratio to average net assets of:
Operating expenses 1.25%(5) 2.00%(5) 2.00%(5) 1.50%(5)
Net investment income 0.88%(5) 0.12%(5) 0.19%(5) 0.68%(5)
Portfolio turnover 43%(4) 43%(4) 43%(4) 43%(4)
Average commission rate paid(6) $0.0326 $0.0326 $0.0326 $0.0326
</TABLE>
(1) Distributions are made in accordance with the Prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.11, $0.11, $0.11 and $0.11, respectively.
(3) Maximum sales charges are not reflected in the total return calculation.
(4) Not annualized
(5) Annualized
(6) A fund is required to disclose its average commission rate per share for
securities trades on which commissions are charged. This rate generally
does not reflect mark-ups, mark-downs, or spreads on shares traded on a
principal basis.
See Notes to Financial Statements
15
<PAGE>
PHOENIX EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The Phoenix Equity Series Fund (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company
whose shares are offered in two separate Series, each a "Fund". Each Fund has
distinct investment objectives.
Phoenix Core Equity Fund seeks long-term capital appreciation by investing
in a diversified portfolio of common stocks. Phoenix Growth and Income Fund
seeks dividend growth, current income and capital appreciation by investing in
common stocks.
Each Fund offers Class A, Class B, Class C and Class M shares. Class A
shares are sold with a front-end sales charge of up to 4.75%. Class B shares
are sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares are sold
with a 1% contingent deferred sales charge if redeemed within one year of
purchase. Class M shares are sold with a front-end sales charge of up to 3.50%.
All classes of shares have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. Income and expenses of each Fund are borne pro rata by
the holders of all classes of shares, except that each class bears distribution
expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. Security valuation:
Equity securities are valued at the last sale price, or if there had been
no sale that day, at the last bid price. Debt securities are valued on the
basis of broker quotations or valuations provided by a pricing service which
utilizes information with respect to recent sales, market transactions in
comparable securities, quotations from dealers, and various relationships
between securities in determining value. Short-term investments having a
remaining maturity of 60 days or less are valued at amortized cost which
approximates market. All other securities and assets are valued at fair value
as determined in good faith by or under the direction of the Trustees.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date or, in the case of certain foreign securities, as soon as the Fund is
notified. The Trust does not amortize premiums but does accrete discounts using
the effective interest method. Realized gains and losses are determined on the
identified cost basis.
C. Income taxes:
Each of the Funds is treated as a separate taxable entity. It is the
policy of each Fund in the Trust to comply with the requirements of the
Internal Revenue Code (the "Code"), applicable to regulated investment
companies, and to distribute all of its taxable and tax-exempt income to its
shareholders. In addition, each Fund intends to distribute an amount sufficient
to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision for federal income taxes or excise taxes has been made.
D. Distributions to shareholders:
Distributions are recorded by each Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, foreign
currency gain/loss, partnerships, operating losses and losses deferred due to
wash sales and excise tax regulations. Permanent book and tax basis differences
relating to shareholder distributions will result in reclassifications to paid
in capital.
E. Foreign currency translation:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at
the trade date. The gain or loss resulting from a change in currency exchange
rates between the trade and settlement dates of a portfolio transaction is
treated as a gain or loss on foreign currency. Likewise, the gain or loss
resulting from a change in currency exchange rates between the date income is
accrued and paid is treated as a gain or loss on foreign currency. The Trust
does not separate that portion of the results of operations arising from
changes in exchange rates and that portion arising from changes in the market
prices of securities.
F. Forward currency contracts:
Each Fund may enter into forward currency contracts in conjunction with
the planned purchase or sale of foreign
16
<PAGE>
PHOENIX EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998 (Unaudited) (Continued)
denominated securities in order to hedge the U.S. dollar cost or proceeds.
Forward currency contracts involve, to varying degrees, elements of market risk
in excess of the amount recognized in the statement of assets and liabilities.
Risks arise from the possible movements in foreign exchange rates or if the
counterparty does not perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in
market value is recorded by each Fund as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Fund records a
realized gain (or loss) equal to the change in the value of the contract when
it was opened and the value at the time it was closed or offset.
G. Expenses:
Expenses incurred by the Trust with respect to more than one Fund are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund or an alternative allocation method can be more
fairly made.
H. Repurchase agreements:
A repurchase agreement is a transaction where a Fund acquires a security
for cash and obtains a simultaneous commitment from the seller to repurchase
the security at an agreed upon price and date. Each Fund, through its
custodian, takes possession of securities collateralizing the repurchase
agreement. The collateral is marked-to-market daily to ensure that the market
value of the underlying assets remains sufficient to protect the Fund in the
event of default by the seller. If the seller defaults and the value of the
collateral declines, or, if the seller enters insolvency proceedings,
realization of collateral may be delayed or limited.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
The advisers to the Trust are Duff & Phelps Investment Management Co.
("DPIM") and Phoenix Investment Counsel, Inc. ("PIC"). DPIM is a subsidiary of
Phoenix Duff & Phelps Corporation, which is an indirect, majority-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"). PIC is an
indirect, majority-owned subsidiary of PHL. As compensation for their services
to the Trust, the Advisers are entitled to a fee based upon the following
annual rates as a percentage of the average daily net assets of each separate
Fund:
1st $1-2 $2+
Fund Adviser $1 Billion Billion Billion
- -------------------------------- --------- ------------ --------- ----------
Core Equity Fund ............... DPIM 0.75% 0.70% 0.65%
Growth and Income Fund ......... PIC 0.75% 0.70% 0.65%
The Advisers have voluntarily agreed to reimburse or waive total fund
operating expenses of each respective Fund, excluding interest, taxes,
brokerage fees, commissions and extraordinary expenses until August 31, 1998,
to the extent that such expenses exceed the following percentages of average
annual net assets:
Class A Class B Class C Class M
- ------------ --------- --------- ----------
1.25% 2.00% 2.00% 1.50%
Phoenix Equity Planning Corporation ("PEPCO"), an indirect, majority-owned
subsidiary of PHL, serves as the national distributor of the Trust's shares.
PEPCO has advised the Trust that it retained net selling commissions of $21,537
for Class A shares and $1,952 for Class M shares, and deferred sales charges of
$1,316 for Class B shares and $1,607 for Class M shares for the period ended
February 28, 1998. In addition, each Fund pays PEPCO a distribution fee at an
annual rate of 0.25% for Class A shares, 1.00% for Class B shares, 1.00% for
Class C shares and 0.50% for Class M shares applied to the average daily net
assets of the Fund. The Distributor has advised the Trust that of the total
amount expensed for the period ended February 28, 1998, $39,342 was earned by
the Distributor, $4,240 was paid to unaffiliated participants, and $464 was
paid to W.S. Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Trust, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.05% of average
daily net assets up to $100 million, 0.04% of average daily net assets of $100
million to $300 million, 0.03% of average daily net assets of $300 million
through $500 million, and 0.015% of average daily net assets greater than $500
million; a minimum fee may apply. PEPCO serves as the Trust's Transfer Agent
with State Street Bank and Trust Company as sub-transfer agent. For the period
ended February 28, 1998, transfer agent fees were $76,362 of which PEPCO
retained $66 which is net of the fees paid to State Street.
17
<PAGE>
PHOENIX EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998 (Unaudited) (Continued)
At February 28, 1998, PHL and affiliates held Trust shares which
aggregated the following:
Aggregate
Net Asset
Shares Value
--------- -------------
Core Equity Fund--Class A .......... 471,749 $5,302,462
Core Equity Fund--Class B .......... 10,029 112,430
Core Equity Fund--Class C .......... 10,028 112,419
Core Equity Fund--Class M .......... 10,023 112,653
Growth and Income Fund--Class A .... 473,115 5,407,701
Growth and Income Fund--Class B .... 10,056 114,744
Growth and Income Fund--Class C .... 10,054 114,721
Growth and Income Fund--Class M .... 10,058 114,967
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the period ended February 28,
1998 (excluding U.S. Government and agency securities, short-term securities,
and forward currency contracts) aggregated the following:
Purchases Sales
-------------- -------------
Core Equity Fund .............. $14,867,136 $3,248,156
Growth and Income Fund ........ 33,440,454 6,741,744
There were no purchases or sales of long-term U.S. Government and agency
securities during the period ended February 28, 1998.
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
5. SUBSEQUENT EVENT
Class M Shares are currently closed to new investors and subsequent
investments by existing shareholders. Existing shareholders in Class M Shares
may exchange their shares for Class M Shares of any other affiliated Phoenix
Fund without paying any fees or sales charges provided the fund into which the
exchange is made has existing Class M Shares investors at the time of the
exchange.
This report is not authorized for distribution to prospective investors in
the Phoenix Equity Series Fund unless preceded or accompanied by an effective
Prospectus which includes information concerning the sales charge, the Fund's
record and other pertinent information.
18
<PAGE>
PHOENIX EQUITY SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
Steven L. Colton, Vice President
William E. Keen, III, Vice President
William R. Moyer, Vice President
Diane L. Mustain, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Clerk and Secretary
Investment Advisers
Duff & Phelps Investment Management Co.
(Phoenix Core Equity Fund)
55 East Monroe Street
Suite 3800
Chicago, Illinois 60603
Phoenix Investment Counsel, Inc.
(Phoenix Growth and Income Fund)
56 Prospect Street
Hartford, Connecticut 06115-0480
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodian
Street Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
How to Contact Us
Customer Service 1-800-243-1574 (option 0)
Automated Voice Response Unit 1-800-243-1574 (option 1)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[BACK COVER]
Phoenix Funds
PO Box 2200
Enfield CT 06083-2200
[PHOENIX DUFF&PHELPS LOGO]
- - - - - - - - |
|BULK RATE MAIL |
| |
| U.S. POSTAGE |
| |
| PAID |
| |
|SPRINGFIELD, MA |
| |
|PERMIT NO. 444 |
- - - - - - - - |
PDP 212 (4/98)
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<NAME> PHOENIX CORE EQUITY FUND CLASS C
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<DIVIDEND-INCOME> 48
<INTEREST-INCOME> 10
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<EXPENSES-NET> (53)
<NET-INVESTMENT-INCOME> 5
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<APPREC-INCREASE-CURRENT> 1223
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</TABLE>
<TABLE> <S> <C>
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<NAME> PHOENIX GROWTH AND INCOME FUND CLASS A
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<S> <C>
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<EXPENSES-NET> (92)
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<NET-CHANGE-FROM-OPS> 2946
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<NET-CHANGE-IN-ASSETS> 18483
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
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<NAME> PHOENIX GROWTH AND INCOME FUND CLASS B
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 150
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<PAID-IN-CAPITAL-COMMON> 27177
<SHARES-COMMON-STOCK> 662
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<OVERDISTRIBUTION-NII> (10)
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2496
<NET-ASSETS> 30030
<DIVIDEND-INCOME> 120
<INTEREST-INCOME> 16
<OTHER-INCOME> 0
<EXPENSES-NET> (92)
<NET-INVESTMENT-INCOME> 44
<REALIZED-GAINS-CURRENT> 406
<APPREC-INCREASE-CURRENT> 2496
<NET-CHANGE-FROM-OPS> 2946
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> (8)
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<NUMBER-OF-SHARES-REDEEMED> (10)
<SHARES-REINVESTED> 2
<NET-CHANGE-IN-ASSETS> 7550
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<GROSS-EXPENSE> 261
<AVERAGE-NET-ASSETS> 14837
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.02
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<PER-SHARE-NAV-END> 11.41
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 023
<NAME> PHOENIX GROWTH AND INCOME FUND CLASS C
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-25-1997
<PERIOD-END> FEB-28-1998
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<INVESTMENTS-AT-VALUE> 30470
<RECEIVABLES> 783
<ASSETS-OTHER> 72
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31325
<PAYABLE-FOR-SECURITIES> 1145
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 150
<TOTAL-LIABILITIES> 1295
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27177
<SHARES-COMMON-STOCK> 302
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (10)
<ACCUMULATED-NET-GAINS> 367
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2496
<NET-ASSETS> 30030
<DIVIDEND-INCOME> 120
<INTEREST-INCOME> 16
<OTHER-INCOME> 0
<EXPENSES-NET> (92)
<NET-INVESTMENT-INCOME> 44
<REALIZED-GAINS-CURRENT> 406
<APPREC-INCREASE-CURRENT> 2496
<NET-CHANGE-FROM-OPS> 2946
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2)
<DISTRIBUTIONS-OF-GAINS> (2)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 304
<NUMBER-OF-SHARES-REDEEMED> (2)
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<NAME> PHOENIX GROWTH AND INCOME FUND CLASS M
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